‘Private Option’ For Medicaid Expansion Would Cut Some Benefits

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WASHINGTON — When Arkansas won federal approval to use Medicaid expansion dollars to help low-income people purchase private health insurance, officials on both sides of the aisle applauded the compromise.

For supporters of the Affordable Care Act, it meant coverage for the millions of uninsured Americans who live in states that have resisted Medicaid expansion under the ACA. For governors and lawmakers opposed to the law, it was a politically feasible way to accept billions in federal dollars and improve the overall health of their residents without embracing “Obamacare.”

Now, as more states craft their own versions of what is known as the “private option” — and Arkansas seeks revisions to its original plan — advocates are increasingly concerned that the private market approach to Medicaid expansion could erode the effectiveness of the Medicaid program.

At issue are so-called “wraparound” benefits, such as free rides to doctor’s offices, designed to give low-income people the same kind of care and health outcomes as people with higher incomes. Such benefits typically are not included in private insurance plans.

“Medicaid is different from private insurance for a lot of good reasons,” said Joan Alker, director of Georgetown University’s Center for Children and Families. “Trying to make it look like private insurance without Medicaid’s unique features could lead to worse health outcomes, increased hospitalization and more preventable deaths.”

Non-emergency transportation may be the most prominent “wraparound” benefit, but it is not the only one.

Other benefits include the periodic screening, diagnosis and treatment of children and young adults for conditions such as lead poisoning, malnutrition and mental illness, as well as limits on co-pays and premiums, which can prompt people to do without care. Medicaid agencies also are required to provide a consumer appeals process for rejections of eligibility and denial of claims.

Middle-class people with private insurance don’t expect any of these benefits to be included in their policies. “But for low-income people with no discretionary income, these services make a huge difference,” said policy analyst Marsha Simon, president of Simon and Company.